Orion Infusion’s abnormal share price jump raises questions

The unusual price hike of Orion Infusion Limited’s stocks is raising many eyebrows as the company is one of the weakest pharmaceutical firms listed in the stock market with poor business performance.

This loss-making company’s share price has jumped 185 percent in just three months, a feat even the best-performing companies can hardly attain.

In the latest trading session on the Dhaka Stock Exchange (DSE), the company’s share price touched the bourse’s upper limit and its trade had to be halted.

Market insiders sense manipulation and believe a circle is playing an active role behind this.

These manipulators want to reap the profits by artificially hiking the company’s shares at an abnormal rate, they say. Unwise investment in such stocks puts ordinary investors at risk.

According to company sources, the net profit of Orion Infusions for the first nine months of the fiscal year 2021-22 (July’21-March’22) after deducting operating expenses, interest-related expenses and tax accruals and adding other income stood at Tk 2.91 crore or Tk 1.43 per share.

However, even with such low earnings per share (EPS), Orion Infusion’s share price has now surpassed Square Pharma’s, the most profitable listed company in the pharmaceutical sector.

According to DSE data, three months ago, Orion Infusion’s shares were priced at Tk 77.40 each. Since July 20, this price has been rising at an abnormal pace, which many believe is artificial.

On August 24, the company’s share price rose to Tk 200, which on the next day jumped to Tk 220, triggering DSE’s maximum limit and its share trade was halted.

A director of the DSE said on condition of anonymity that the primary reason for market exploiters to choose Orion Infusion as a manipulation tool is because of its small capital.

He said the paid up capital of this company is just Tk 20.36 crore. As such, the number of shares is about two and a half crore. About 41 percent of the company’s shares are owned by its directors and sponsors. The remaining 1.21 crore shares are for others.

“Because of this relatively small share count, manipulators can easily create a crisis in the share,” the DSE director said.

In this regard, the capital market expert Professor Abu Ahmed said the way the company’s share price is increasing every day is not normal at all. It is clear that some manipulation is going on behind the scene.

To protect investors from exploitation, the market regulator should take immediate notice of the matter and take action against the culprits, he added.